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Vetropack reports sustained profitability in 1H 2005

Vetropack Holding AG generated a consolidated turnover of CHF 257.3 million during the 1H 2005, up 5.5% (3.9% after currency adjustments) on turnover of CHF 243.8 million for the 1H 2004, the Swiss pa…

Vetropack Holding AG generated a consolidated turnover of CHF 257.3 million during the 1H 2005, up 5.5% (3.9% after currency adjustments) on turnover of CHF 243.8 million for the 1H 2004, the Swiss packaging group said 2 September 2005. Consolidated profits for the half year reached CHF 23.0 million (2004: CHF 19.9 million). With EBIT valued at CHF 28.4 million (CHF 26.2 million in 2004) and cash flow at CHF 45.9 million (CHF 40.5 million for 2004), Vetropack Group says it managed to sustain its profitability at a healthy level during 1H 2005. Cash flow represents 17.8% of gross revenues. With 1.79 billion glass packaging units sold, quantitative sales rose by 7.1%. Vetropack Group said the most distinctive development in sales arose from the Croatian company, which again profited from regional market dynamics. Thanks to the rapid expansion of international food and beverage producers in the Eastern European market, the Czech company, which works closely with the production facility in Slovakia, also recorded above average growth. Following a fall in demand in 2004, Vetropack Austria was again able to regenerate moderate sales growth. Meanwhile sales in Switzerland were down on 2004 as a lower legal blood alcohol limit of 0.5 per 1000 for drivers was introduced. Vetropack said the increase in gross turnover had a positive effect on profit figures. Consolidated EBIT increased to CHF 28.4 million (2004: CHF 26.2 million), equivalent to 11.0% of gross turnover. Consolidated profits for the half year rose by 15.2% to CHF 23.0 million (2004: CHF 19.9 million), while cash flow increased by 13.1% to CHF 45.9 million (2004: CHF 40.5 million). Cash flow margin was 17.8% of gross turnover. Looking ahead to the 2H of 2005, the company said the cool summer weather meant that bottling plants and retailers kept relatively high inventory levels, consequently new orders of glass packaging during the subsiding summer months remain modest. The shortfall is unlikely to be offset by orders from the food sector. A strain on financial results for the 2H of 2005 is expected due to the pressure on margins from the Czech and Slovakian operations, as well as the replacement of a furnace in the Austrian plant in Pchlarn, which will result in a two month interruption of flint glass production during the 4Q. On the basis of this assessment, and on the assumption that all production facilities will continue to operate at full capacity, Vetropack says it expects year end results to be in line with those of the previous year. Based on projected earnings for 2005, Vetropack Holding Ltd expects results for the 2005 fiscal year to be in line with those of 2004.

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